Clouds are gathering over the French economy as 2023 approaches. While the Banque de France will release its latest forecasts next week, its governor, François Villeroy de Galhau, anticipated a difficult year on Friday.
“A significant slowdown”
The negative signals were later reiterated: “The European and French economies will face a significant slowdown next year, and we cannot rule out a limited recession,” François Villeroy de Galhau said in a speech at an event organized in Prague by the European think tank . Eurofi.
However, if the French economy were to contract in 2023, a possible recession “would have nothing to do” with the historic drop in French GDP in 2020 due to the Covid-19 pandemic, the Banque de France told AFP. The recession would also be “limited in time,” says the same source.
The governor’s statements are, however, a warning, two days after INSEE published its latest economic report in which the institute forecasts a slowdown in growth in the third quarter (0.2%) before the stagnation of GDP in the last three months of the year.
The government’s latest growth forecast is 1.4% for 2023, but it could be revised down in the coming days, due to the presentation of the finance bill for 2023 and the government’s budget trajectory until the end of the second five-year term of Emmanuel Macron. term of one year.
“A sequence in 3R”
François Villeroy de Galhau, however, seems to see 2023 as a low point rather than the start of a prolonged reversal.
According to him, France has assets. “The point of satisfaction is employment, which is holding up quite well and the unemployment rate remains relatively low. And that is an advantage to face this crisis,” explained François Villeroy de Galhau. A positive note as inflation weighs on households and businesses alike.
But the year 2022 should end in peace. “Today in 2022 activity is holding up quite well, and even let’s be clear, better than expected. […] Demand is holding up well, especially in services, the summer was a very good season in particular for tourism. We had already had a good surprise in growth in the second quarter, 0.5(%), and here we expect better than expected, at 0.3(%) in the third quarter, explained François Villeroy de Galhau. The bottom line is that on 2022 growth, we said 2.3% in June, we’ll release our forecasts next week, we’ll be above that. In 2022 it is rather a good surprise.”
Source: BFM TV
